Smithfield Foods, Inc. has announced that the merger of Campofrio Alimentacion S.A. and Group Smithfield Holdings S.L. has been finalised.

The new company will be known as Campofrio Food Group and will be listed on the Madrid and Barcelona Stock Exchanges.

The merger creates the largest pan-European company in the packaged meats sector and one of the five largest worldwide. The company will have an important presence in the EU market. 

Smithfield Foods owns 37 percent or about 37.8 million shares of the new company. Smithfield previously owned 24 percent of Campofrio and 50 percent of Groupe Smithfield. Other significant shareholders are Oaktree Capital (24 percent), Pedro and Fernando Ballve (12 percent), Diaz Family and Luis Serrano (five percent), Caja Burgos (four percent) and QMC (two percent). The public will hold the remaining 16 percent.

The merger is a major step in Smithfield's strategy to grow and improve its global packaged meats presence said Larry Pope, Smithfield Foods president and CEO, adding that the companies have complimentary manufacturing and marketing platforms, presenting the opportunity for value creation and synergies.

Pope noted that this transaction converts Smithfield's Western European ventures into a more liquid investment, with its shares in the publicly-traded company having a market value of over US$350 million, based on closing price on December 2, 2008.

With sales of US$12 billion, Smithfield Foods is the leading processor and marketer of fresh pork and packaged meats in the US, as well as the largest hog producer.